BOSTON, Feb. 22,
2022 /PRNewswire/ -- Houghton Mifflin Harcourt
Company (Nasdaq: HMHC) ("HMH," or the "Company"), a learning
technology company, today announced that it has entered into a
definitive merger agreement with certain affiliates of Veritas
Capital ("Veritas"), a leading private investment firm, for the
acquisition of the Company.
Pursuant to the terms of the agreement, HMH shareholders will be
entitled to receive $21 in cash per
share through a tender offer. The per share purchase price
represents a 36% premium to the Company's unaffected share price as
of January 13, 2022 and implies an
equity value of approximately $2.8
billion.
The decision to enter into an agreement with Veritas was the
result of a deliberate and thorough strategic review process
overseen by HMH's Board of Directors. As part of that review, the
Company held discussions with several potential strategic and
financial bidders, including Veritas, through a formal process.
Further details of the transaction and background of the sale
process will be included in the Company's Schedule 14D-9 with
respect to the tender offer.
"Partnering with Veritas will provide HMH with the opportunity
to accelerate our momentum and increase our impact on the four
million teachers and 50 million students that we support each day.
With accelerating billings growth, strong free cash flow and a
transformed cost structure, we are at an important inflection
point, and the time is right to move into the next phase of our
long-term growth strategy alongside a partner that brings
significant industry expertise," said Jack
Lynch, President and Chief Executive Officer of HMH, who
will continue to lead the Company along with the current management
team. "As the promise of digital learning increasingly takes hold
across the nation, we are confident this transaction will deepen
our ability to bring the power of learning to even more teachers
and their students, invest in our purpose-driven team, and have a
positive impact on the communities we serve."
"We recognize HMH as one of the storied brands in education and
are excited to partner with the company to expand its
market-leading digital solutions and deliver the most efficacious
products to students and teachers," said Ramzi Musallam, Chief Executive Officer and
Managing Partner of Veritas. "Over Veritas' two decades of
investing, education and technology have both become critical areas
of focus across our portfolio. We look forward to bringing to bear
our deep experience in K-12 education and proven track record to
meaningfully invest in the Company to help drive better outcomes
for students across the nation."
The agreement was unanimously approved by HMH's Board of
Directors. The transaction is expected to be completed in the
second quarter of 2022, subject to receipt of requisite regulatory
approvals and satisfaction of customary closing conditions.
Evercore served as financial advisor, and WilmerHale served as
legal counsel to HMH. Milbank LLP acted as legal advisor to
Veritas. Bank of America, JPMorgan Chase Bank, N.A., Deutsche Bank
and Macquarie Capital are providing committed financing for the
proposed transaction.
Fourth Quarter and Full Year 2021 Results
As
previously announced, the Company will release its fourth quarter
and full year 2021 results before the market opens on Thursday, February 24, 2022.
Given the transaction announced today, HMH will not conduct its
previously scheduled earnings conference call or provide financial
guidance in conjunction with its fourth quarter 2021 earnings
release.
About HMH
Houghton Mifflin
Harcourt (Nasdaq: HMHC) is a learning technology company
committed to delivering connected solutions that engage learners,
empower educators and improve student outcomes. As a leading
provider of K–12 core curriculum, supplemental and intervention
solutions, and professional learning services, HMH partners with
educators and school districts to uncover solutions that unlock
students' potential and extend teachers' capabilities. HMH serves
more than 50 million students and four million educators in 150
countries. For more information, visit www.hmhco.com.
About Veritas Capital
Veritas is a longstanding
technology investor with a focus on companies operating at the
intersection of technology and government. The firm invests in
companies that provide critical products, software, and services,
primarily technology and technology-enabled solutions, to
government and commercial customers worldwide. Veritas seeks to
create value by strategically transforming the companies in which
it invests through organic and inorganic means.
Leveraging technology to make a positive impact across vitally
important areas, such as healthcare, education, and national
security, is core to Veritas. We are proud stewards of national
assets, improving the quality of healthcare while reducing cost,
advancing our educational system, and protecting our nation and
allies. For more information, visit www.veritascapital.com.
Contacts
For Houghton Mifflin Harcourt
Investor Relations
Chris Symanoskie, IRC
VP, Investor Relations
410-215-1405
Chris.Symanoskie@hmhco.com
Media Relations
Bianca Olson
SVP, Corporate Affairs
617-351-3841
Bianca.Olson@hmhco.com
For Veritas Capital
Sard Verbinnen & Co
Jenny Gore / Julie Rudnick
VeritasCapital-SVC@SARDVERB.com
Important Information
The tender offer for the outstanding shares of HMH common stock
has not yet commenced. This communication is for informational
purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell shares of HMH common stock. The
solicitation and offer to buy shares of HMH common stock will only
be made pursuant to the tender offer materials that Veritas intends
to file with the U.S. Securities and Exchange Commission (the
"SEC"). At the time the tender offer is commenced, Veritas will
file a tender offer statement on Schedule TO with the SEC, and HMH
will file a solicitation/recommendation statement on Schedule 14D-9
with respect to the tender offer. HMH's STOCKHOLDERS ARE ADVISED TO
READ THE SCHEDULE TO (INCLUDING AN OFFER TO PURCHASE, A RELATED
LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SCHEDULE
14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME,
AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE
TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION AND THE PARTIES THERETO. Both the tender
offer statement and the solicitation/recommendation statement will
be mailed to HMH's stockholders free of charge. Investors and
stockholders may obtain free copies of the Schedule TO and Schedule
14D-9, as each may be amended or supplemented from time to time,
and other documents filed by the parties (when available) at the
SEC's web site at www.sec.gov, by contacting HMH's Investor
Relations either by telephone at 410-215-1405 or e-mail at
Chris.Symanoskie@hmhco.com or on HMH's website at
www.hmhco.com.
Forward-Looking Statements
This press release includes forward-looking statements which
reflect management's current views and estimates regarding the
ability of the parties to complete the proposed transaction and the
expected timing of completion of the proposed transaction, among
other matters. The words "anticipate", "assume", "believe",
"continue", "could", "estimate", "expect", "forecast", "future",
"guidance", "imply", "intend", "may", "outlook", "plan",
"potential", "predict", "project", and similar terms and phrases
are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. HMH
cannot assure investors that future developments affecting HMH will
be those that it has anticipated. Actual results may differ
materially from these expectations due to, among other things: (i)
uncertainties as to the timing and expected financing of the tender
offer; (ii) the risk that the proposed transaction may not be
completed in a timely manner or at all; (iii) the possibility that
competing offers or acquisition proposals for HMH will be made;
(iv) uncertainty surrounding how many of HMH's stockholders will
tender their shares in the tender offer; (v) the possibility that
any or all of the various conditions to the consummation of the
tender offer may not be satisfied or waived, including the failure
to receive any required regulatory approvals from any applicable
governmental entities; (vi) the possibility of business disruptions
due to transaction-related uncertainty; (vii) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement; (viii) the risk that
stockholder litigation in connection with the proposed transaction
may result in significant costs of defense, indemnification and
liability; and (ix) and other risks and uncertainties including
those identified under the heading "Risk Factors" in HMH's most
recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q, each of which are filed with the SEC and available at
www.sec.gov, and other filings that HMH may make with the SEC in
the future. If one or more of these risks or uncertainties
materialize, or if any of HMH's assumptions prove incorrect, actual
results may vary in material respects from those projected or
anticipated in these forward-looking statements.
Any forward-looking statement made by HMH in this press release
speaks only as of the date hereof. Factors or events that could
cause actual results to differ may emerge from time to time, and it
is not possible for HMH to predict all of them. HMH does not
undertake and specifically disclaims any obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by any applicable securities laws.
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SOURCE Houghton Mifflin Harcourt